Alternatives to Going Public

While the steps in the going public process are similar regardless of which route one takes in achieving trading status, the routes, which are available to that point vary widely. Here are listed paths to tradability with which we can offer assistance:

505 Regulation D Private Placement Offerings

A “505” offering, under Regulation D allows a company to raise up to $5,000,000 in the period of one year from “non-accredited” investors totaling 35. There are specific requirements for this private offering and definitions of “accredited” vs. “non-accredited” needs to be disclosed and understood by potential investors.

Under rule 144, it takes a year after an offering is completed to file necessary paperwork in order to become publicly traded. This is probably the easiest way of going public. It can be done in any state so friends and associates can purchase stock through the offering within specified parameters. This is often the easiest menas of raising a modest amount of capital and becoming publicly traded. Because it is open to “non-accredited” investors, audited accounting information is required.

506 Private Placement Offerings

This offering is similar to a 505 offering with the exceptions of not requiring audited financial statements and the maximum number of investors is not specified but they must be “accredited”. While this may be less expensive because of a eriment, it may be more difficult to obtain “accredited” investors, which could affect the completion time. This may be preferable to a 505 when feasible, because of the accreditation factor.

Registered 505 or 506 Offering

Filing a document such as an S-1 or Form 10 registration adds expense to the offering process but can result in a “fully reporting company” which is considered by many to have more value than a non-reporting company. One advantage of this type of offering is that once trading, the shares of the company acquired in the offering process may be tradable in 6 months as opposed to one year under rule 144.

Fully reporting companies have on-going dislosure and doumentation requirements, which may help an investor in making investment decisions. From the company standpoint, there are substantial added expenses but there also may be a substantial increase in corporate value.

Other Offering Formats

There are a number of offering formats not described here, such as a Regulation A, Regulation S, 504’s including “Score” (U-&), etc. While we have some experience with these, at the present, for a number of reasons they are not recommended.

With each client engagement we maintain rigorous and disciplined adherence to pre-determined end goals, delivering expert results throughout a vague, fragmented and difficult process.